Correlation Between Nexa Resources and HudBay Minerals
Can any of the company-specific risk be diversified away by investing in both Nexa Resources and HudBay Minerals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nexa Resources and HudBay Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexa Resources SA and HudBay Minerals, you can compare the effects of market volatilities on Nexa Resources and HudBay Minerals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nexa Resources with a short position of HudBay Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexa Resources and HudBay Minerals.
Diversification Opportunities for Nexa Resources and HudBay Minerals
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nexa and HudBay is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Nexa Resources SA and HudBay Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HudBay Minerals and Nexa Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nexa Resources SA are associated (or correlated) with HudBay Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HudBay Minerals has no effect on the direction of Nexa Resources i.e., Nexa Resources and HudBay Minerals go up and down completely randomly.
Pair Corralation between Nexa Resources and HudBay Minerals
Given the investment horizon of 90 days Nexa Resources SA is expected to generate 0.6 times more return on investment than HudBay Minerals. However, Nexa Resources SA is 1.65 times less risky than HudBay Minerals. It trades about -0.1 of its potential returns per unit of risk. HudBay Minerals is currently generating about -0.08 per unit of risk. If you would invest 786.00 in Nexa Resources SA on August 28, 2024 and sell it today you would lose (31.00) from holding Nexa Resources SA or give up 3.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexa Resources SA vs. HudBay Minerals
Performance |
| Timeline |
| Nexa Resources SA |
| HudBay Minerals |
Nexa Resources and HudBay Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexa Resources and HudBay Minerals
The main advantage of trading using opposite Nexa Resources and HudBay Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexa Resources position performs unexpectedly, HudBay Minerals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HudBay Minerals will offset losses from the drop in HudBay Minerals' long position.| Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources vs. EMX Royalty Corp |
| HudBay Minerals vs. Lundin Mining | HudBay Minerals vs. First Quantum Minerals | HudBay Minerals vs. Ivanhoe Mines | HudBay Minerals vs. Capstone Mining Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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